supreme court photo

The Supreme Court announced today, that they have decided to uphold tax subsidies for individuals purchasing their health insurance through the federal exchange.

Opponents of the subsidies argued in King v. Burwell that the millions of individuals enrolled in the federal health insurance exchange and receiving tax subsidies were ineligible because they resided in states that had not established a state-run exchange. The Supreme Court, in a 6-3 ruling, upheld the Obama Administration’s interpretation of the Patient Protection and Affordable Care Act (PPACA) and agreed that health care subsidies should not depend on where a person lives.

The entire King v. Burwell ruling can be found here.

This is the second major Supreme Court win for supporters of the PPACA, further strengthening the chances it remains in tact. So, what does this mean for employers, employees and the future of exchanges?

For employers, it doesn’t really have an immediate effect, as it is simply business as usual under the ACA.  The exchanges will continue to be a potential distribution vehicle via brokers for health and dental insurance with or without subsidies.

For employees, it signals an opportunity to once again look at the exchanges for alternatives to employer insurance offerings and investigate potential subsidies and savings.

While the PPACA is well underway in its implementation, one major component that still causes much anxiety among employers is the Cadillac Tax, which is slated to take effect in 2018. If you’d like more information about the implications of the Cadillac Tax, here is a helpful synopsis of what we do know about it currently and here is a very helpful Cadillac Tax calculator that Spring’s actuarial team developed for employers.

Of course, if you have any questions about the Affordable Care Act, let us know. Our team of compliance experts is ready to help your business navigate the rough waters of health care reform.

Photo by Jeff Kubina